Paytm Shares Plummet After RBI Axes Payments Bank Licence

Paytm's parent company, One97 Communications, experienced an over 8% drop in share prices after the RBI cancelled Paytm Payments Bank's licence. The cancellation was due to non-compliance and potential harm to depositors' interests. Paytm Payments Bank remains solvent, despite the regulatory scrutiny.

Shares of One97 Communications, the parent company of Paytm, nosedived over 8% on Monday in response to the Reserve Bank of India's decision to revoke the banking licence of Paytm Payments Bank. The RBI cited non-compliance with stipulated norms and the risk posed to depositors’ interests as reasons for the cancellation.

In early trading on the BSE, the stock plunged 8.37% to Rs 1,051.05, and mirrored a similar dip at the NSE by 8.38% to Rs 1,051.10. However, as the session progressed, the stock recovered some losses, closing 3.02% lower at Rs 1,112.50 on the BSE, and 2.93% down to Rs 1,114.95 on the NSE.

The dissolution of the licence follows ongoing scrutiny, including restrictions imposed by the RBI in March 2022, which barred Paytm Payments Bank from enrolling new customers. Still, the bank maintains sufficient liquidity to settle all deposit liabilities as per the RBI's statement. One97 Communications reassured stakeholders, reiterating that it had already de-risked itself by writing off its investment in the entity by March 31, 2024.